# Gross profit formula cost of sales.asp

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Thus, Gross Profit is arrived at by deducting the cost of goods sold from sales. However, if the cost of sales of your business is in excess of sales revenue, it results in Gross Loss for your business. Thus, the formula for calculating Gross Profit is as follows: Gross Profit = Sales – (Purchases + Direct Expenses) Gross Profit = Net Sales – Cost of Goods and Services Net Sales refers to sales of products and services – not income from the sale of investments and assets. Also, be sure to subtract discounts and allowances from this figure. Jan 18, 2018 · If you’re selling cans of cola, for example, your gross profit is the amount of money you take from your customers minus the amount it cost to buy the cans. So, if the retail price is £1 and you buy the cans from a wholesaler at 50p, then your gross profit is 50p.